Under Hefner, Playboy to Be Private Again

By CHRIS V. NICHOLSON

Published: January 11, 2011

Playboy Enterprises said Monday that it had agreed to be taken private by Mr. Hefner, its founder and dominant shareholder, in a deal that values Playboy at about $207 million.

''With the completion of this transaction, Playboy will come full circle, returning to its roots as a private company,'' Mr. Hefner said in a statement. ''I believe this agreement will give us the resources and flexibility to return Playboy to its unique position and to further expand our business around the world.''

Mr. Hefner, who created Playboy magazine in 1953, took Playboy Enterprises public in 1971. He is the editor in chief and chief creative officer of the media company, which also produces television programs.

Icon Acquisition Holdings, a partnership that Mr. Hefner controls, is offering $6.15 a share for Playboy, a premium of 18 percent over its closing price Friday, $5.20. Playboy's shares rose 89 cents, or 17.1 percent, to close at $6.09 on Monday.

Last July, Mr. Hefner offered $5.50 a share for Playboy, valuing it at $185 million, but that bid was soon topped by a $210 million offer from FriendFinder Networks, owner of Penthouse magazine.

In the end, the Playboy board decided Mr. Hefner's sweetened bid was ''in the best interests of the company's public stockholders.''

Mr. Hefner already controls 69.5 percent of the company's voting shares and 27.7 percent of its nonvoting shares. Plainfield Asset Management, which holds 19.05 percent of the company, has agreed to the deal.

Icon received equity backing for the deal from the private investment firm Rizvi Traverse Management, and a financing commitment from Jefferies & Company. The Playboy board unanimously approved the deal on Sunday, and it is expected to close Jan. 21.

''This would bring an end to a period of uncertainty for the company and provide the right ownership structure to develop the business,'' said Ben Kohn, a Rizvi partner.

Scott Flanders, chief executive of Playboy, said that its ''strategy is to transform Playboy into a brand management company.''